©G Dear 2009 – Not to be sold/Free to use Taxation General Mathematics Preliminary Simple Interest Stage 6 - Year 11 Press Ctrl-A ©G Dear 2009 – Not to be sold/Free to use

PAYE Income Tax (1/3) Gross Pay is before any deductions are made. When Net Pay is calculated, one of the deductions is Income Tax. P.A.Y.E. income tax is collected periodically. PAYE ay Tax is calculated based on your Taxable Income. s ou Taxable Income = Gross Income - Allowable Deductions arn

Allowable Deductions (2/3) Some Allowable Deductions are for: Expenses incurred in the process of earning your income. Travel related to your employment. Replacement of work uniforms. Cleaning costs of uniforms. Depreciation of equipment. Maintenance of buildings used for work. Approved charitable donations. 3

Calculating Allowable Deductions (3/3) Bill claims $3/week for dry cleaning, $50/month for the telephone, $120/quarter for electricity and $2000 for tools. Calculate his Deductions. Deductions = $3 x 52 weeks + $50 x 12 months + $120 x 4 quarters + $2 000 = $3 236 4